You might remember my story on Norwegian Air Shuttle from last month. I reported that this new discount airline planned to offer super cheap fares on nonstop flights from Los Angeles to London, Copenhagen, Oslo and Stockholm using new Boeing 787s.
There was only one catch. Norway has high costs and a lot of regulation, so Norwegian wanted to register itself in Ireland, where it could operate more freely. As another bonus, Norwegian says being in Ireland will give the carrier more traffic rights to serve more cities. This probably means Norwegian will be able to start up a bunch of new routes without getting special permission each time from regulators.
US airlines and a major U.S. pilots union called ALPA opposed the registration change, saying it was not fair for competition. They said a Norwegian company should be based in Norway — not Ireland. (ALPA is still hoping the U.S. government will ban Norwegian from serving the United States under the Irish scheme, and has set up a website to state its case.)
But according to a release I received today, Norwegian got the OK from the Irish government to set up there.
“With this permit, the administration of Norwegian’s long-haul operation will be relocated to Norwegian Air International Limited (NAI),” company officials wrote. “The company has built its managerial and all mandatory regulatory functions in Dublin. Its aircraft operation will now be governed by the Irish authorities. The Irish regulatory authorities are considered to be among the best in the world.”
Read on for the full release.
Today Irish authorities issued an air operator’s certificate (AOC) and operating license to Norwegian’s subsidiary Norwegian Air International Limited, which is based in Dublin.
With this permit, the administration of Norwegian’s long-haul operation will be relocated to Norwegian Air International Limited (NAI). The company has built its managerial and all mandatory regulatory functions in Dublin. Its aircraft operation will now be governed by the Irish authorities. The Irish regulatory authorities are considered to be among the best in the world. Read more here.
Norwegian has established its long-haul company in Dublin for several reasons. The main reason is access to future traffic rights to and from the EU. Norwegian has more than 260 aircraft on order and the route network will expand rapidly in the years to come. Another important reason for choosing Ireland, and not another country within the EU (though several other European countries – including the UK and Sweden – were considered), is because Ireland has decided to fully adapt the Cape Town Convention, which provides Norwegian with better financing conditions. Furthermore, NAI’s establishment in Ireland does not affect export guarantees in connection with our financing. As well as offering one of the highest ranked civil aviation authorities in the world, Ireland is also a considerable cluster for the aviation industry; major leasing companies that Norwegian cooperates with have offices in Dublin.
It is important to stress that Ireland was not chosen because the country has specific rules and regulations that allow the use of American or Asian crew, like some politicians and unions have claimed. The fact is that Norwegian could have based its long-haul company in any other European country and still used American and Asian crew, the way several other European airlines have been operating for years. The only exception is Norway and partly Denmark, who so far have opted to keep outdated special rules within this area.
Transfer of aircraft to the new AOC
The transfer of the first Dreamliner aircraft to the new EU AOC was completed today. This took place in conjunction with a scheduled maintenance on the aircraft. The remaining aircraft will be transferred gradually. In regards to Norwegian’s long-haul routes to and from the U.S., the U.S. Department of Transportation is now processing Norwegian’s application for a permit. This is regulated by the Open Skies Agreement between the U.S. and the EU, which means that an operator from either party, which fulfils the requirements, should be entitled to operate under this agreement. Today’s announcement means that Norwegian meets all the requirements.
Recently, both competitors and unions have made a number of false allegations against Norwegian and Ireland on this matter. The EU’s transport authorities, the Irish authorities and Norwegian have repeatedly refuted this. Norwegian expects that the U.S. government will process the application in accordance with the principles of the Open Skies Agreement and that Norwegian is given the same rights as were given when we operated on an EEC AOC, once the AOC is transferred from Norway to the EU.